Speaking to Holyrood's Economy Committee, Dr Armstrong said: "The issue becomes, since that's been ruled out, what would be in an independent Scotland's best interests?

"Based on the aspiration, pointed out in the White Paper, to build a Scotland which reflects the values and aspirations of Scottish people, then I think you want to have something that allows you the policy levers to be able to do that.

"There is, in my view, only one option which allows you that full range and that would be your own currency."

A number of concerns have been raised over the currency debate, including whether a new legal tender would create new transaction costs to cross border trading.

Dr Armstrong claimed the experience in other countries highlights that there may not be a significant change, pointing to Norway, Sweden and Switzerland and also what happened when Ireland severed ties with the UK currency in 1979.

He added: "Looking at the trend of Irish exports to the rest of the United Kingdom... it's very hard to discern a break in the trend in exports.

"That's not to say there's no effect, but it looks like the effect may be fairly small based on much of the evidence."

A new currency, linked to sterling, would also be in the interests of the rest of the UK, he suggested.

Professor Jo Armstrong, an economist with the Centre for Public Policy for Regions at University of Glasgow, told the Economy Committee there are pros and cons for all currency options for Scotland.

She said: "If I'm truly independent and I want full access to levers of power, I would want to try and make my own currency work.

"That has got lots and lots or risks associated with it but it allows me to have absolutely full control of the fiscal levers, which is what an independent country would want."

The comments were welcomed by the Scottish Green Party, which backs independence but wants the SNP to consider a new currency for the country.

Green MSP Alison Johnstone, a member of the Economy Committee, said: "It is increasingly clear that a Yes vote opens up opportunities that a No vote is extremely unlikely to. The need to create a fairer and simpler system of taxes has never been greater, and if we want to make different economic choices from Westminster we will need flexibility on currency in the longer term.

"There are of course a range of views on the way forward but crucially Scotland would get to decide. If we want an economy that works for everyone we need to put democratic decisions at its core."

However, Professor David Simpson, who is a Harvard-educated economist and has previously worked for the UN, European Commission, Standard Life and World Bank, told the committee that a currency union would be unlikely.

In his written submission to the committee, Professor Simpson said: "A currency union based on sterling remains the most likely outcome following independence because it is in the best interests of not just Scotland but of England as well.

"It has been suggested that to work properly, a currency union requires political union, but the historical experience of those monetary unions between sovereign states that have been successful provides evidence to the contrary.

"It would be quite possible for Scotland to keep the pound following independence without entering into any formal currency union.

"Indeed, this would not only be possible but, if Scottish interests alone were to count, it would be desirable.

"The Bank of England would not act as a guarantor for Scottish banks or the Scottish Government.

"This is an advantage, not a disadvantage. It was precisely the implied promise of a bailout from the European Central Bank that allowed so many eurozone banks and governments to get themselves into a crisis of excessive debt."